For many business owners, one of the most common questions about outsourced accounting is: “How much should I expect to pay?” The answer, as you’ll hear a lot in accounting and tax, is it depends! However, while accounting costs can vary widely, understanding the common pricing models can help you make the best decision for your business.

Common Pricing Models

Accounting firms typically use one of four pricing approaches:

Hourly Billing

Some accountants bill based on the amount of time spent working on your account. Rates vary by experience and specialty, but often fall in the $150 per hour to $500 per hour range in Minnesota. While hourly billing is straightforward, many business owners find it difficult to predict costs from month to month, or feel discouraged from calling when a problem comes up.

Per Form Billing

Similar to hourly billing, and specific to tax return preparation, per form billing is based on the forms completed on your tax return. Each form has a set price, and your invoice will show the price for each form in the tax return and the grand total. While also straightforward, the price can surprise business owners who have never considered all of the different forms on their tax return.

Project-Based Billing

When a special one-time project is needed, project-based billing is a common pricing practice. The scope of the work can be clearly defined and the engagement is not ongoing. Common examples include catching up prior bookkeeping, sales tax audits, or buy/sell agreements. However, this doesn’t address your business’s ongoing needs, such as accounting, payroll, and tax preparation.

Fixed Monthly Pricing

Many modern accounting firms offer accounting and advisory services for a flat monthly fee. This allows you to budget for your business and avoid surprises. Depending on the level of service required and the size of the business, a small business might pay anywhere from a few hundred dollars to several thousand dollars per month.

Why Fixed Monthly Pricing Is Often Easier to Budget

Many small business owners prefer fixed monthly pricing because it provides predictability. Cost remain consistent, there are few surprises, and owners are more likely to contact their accountant when questions arise. The accountant becomes their trusted advisor as they build an ongoing relationship, not a one-time year-end transaction.

What Affects Accounting Costs?

Several common factors affect the cost of accounting services.

Business Size and Revenue

As revenue grows, operations grow and accounting needs often become more complex. A company with $250,000 in revenue will generally need less than a company with $5 million in revenue.

Number of Transactions

The more transactions, the more time required to account for them all. In addition, more transactions often lead to a greater variety of transactions. You can’t just stuff everything on the profit & loss statement and ignore the balance sheet!

Number of Employees

Payroll processing, payroll tax filings, benefits, and employee-related compliance requirements can all add to your accounting costs, in addition to payroll costs.

Industry Complexity

Some industries have specialized accounting needs. For example, construction companies may have job-costing, retail companies may have specific inventory needs, and medical professionals may have MinnesotaCare Provider Tax requirements.

Quality of Support

Businesses that do not maintain organized information or respond timely will require more time, more questions, and result in higher accounting costs. For your accountant’s sake, please don’t drop off all of your receipts in an unorganized shoebox…

What Is Typically Included?

The services included in each firm’s accounting package vary, but many small businesses receive some combination of:

Bookkeeping

• Recording transactions
• Reconciling bank and credit card accounts
• Maintaining the general ledger

Financial Reporting

• Balance Sheet
• Profit and Loss Statement
• Cash Flow Statement
• Custom Management Reports

Sales Tax Compliance

• Sales Tax Calculations
• Sales Tax Filing
• Sales Tax Remittance

Additional Services

Some firms offer comprehensive services beyond accounting, with payroll and tax being the most common.

Payroll Support

• Payroll Processing
• Payroll Filing
• Payroll Remittance

Advisory

• Law changes
• Budgeting
• Breakeven
• Strategic planning
• Key Performance Indicators

Tax Planning and Preparation

Many business owners mistakenly view tax preparation as their only accounting expense. However, year-round tax planning often delivers greater value by helping businesses take advantage of opportunities, manage estimated tax payments, and avoid suprises.

Cost Vs. Value

When evaluating accounting services, cost should not be the only consideration. Accurate financial reporting can help small business owners make better decisions, improve cash flow, identify profitability issues, and reduce taxes when possible. In many cases, the right accountant saves a business more money than they cost. What level of accounting support does your business need to grow and operate more efficiently?

Finding the Right Fit

Every Minnesota business has unique accounting needs. A sole proprietor with limited transactions likely requires a different level of support than a growing company with employees, inventory, and multiple revenue streams. The best accounting relationships provide expertise, responsiveness, and predictable pricing.

Ready for a conversation? Contact Haworth & Company to discuss your needs and learn how a fixed monthly accounting plan can provide you with the clarity and peace of mind you’ve always wanted.

Disclaimer: This blog content is for general informational purposes only, should not be considered professional advice, and does not establish a client relationship. Haworth and Company is not liable for the accuracy of this information or the content of external links. Please use this information at your own risk, ensuring it suits your specific needs, and consult with a certified tax professional for your own personalized guidance.